BHP & Billiton Merge

BHP Limited
Billiton PLC
19 March 2001


PART 1

BHP LIMITED                                         BILLITON PLC

JOINT STOCK EXCHANGE ANNOUNCEMENT AND PRESS RELEASE

Melbourne, 0800, Monday, 19 March 2001

London, 2130, Sunday, 18 March 2001




BHP AND BILLITON MERGE TO CREATE A

PREMIER DIVERSIFIED GLOBAL RESOURCES GROUP




The Directors of BHP and Billiton have agreed a merger to establish a premier
diversified global resources group, to be called BHP Billiton. The merger will
be achieved through a dual listed company ('DLC') structure, creating a
formidable enterprise of global scale and diversity, with the capacity and
flexibility to pursue international growth opportunities, and with outstanding
access to major capital markets.


BHP Billiton will be run by a unified Board and management team, with
headquarters in Melbourne, Australia, and with a significant corporate
management centre in London. The existing primary listings on the London and
Australian stock exchanges will be maintained, as will the secondary listing
on the Johannesburg Stock Exchange (and an American Depository Receipt listing
on the New York Stock Exchange).


Based on the closing prices of BHP and Billiton shares on 16 March 2001, the
aggregate market capitalisation of BHP Billiton was approximately US$28
billion (£20 billion; A$57 billion), and its enterprise value was
approximately US$35 billion (£25 billion; A$71 billion).


Mr Paul Anderson will be the Chief Executive Officer of BHP Billiton and Mr
Brian Gilbertson will be the Deputy Chief Executive Officer. Mr Anderson will
retire by the end of calendar 2002, to be succeeded by Mr Gilbertson.


No shareholder in either company will need to exchange or tender their shares.
Under the terms of the merger one existing Billiton share will have an
economic interest equivalent to 0.4842 existing BHP shares. In order to ensure
that the economic interest of each BHP and Billiton share is equivalent
following implementation of the DLC, there will be a BHP bonus issue to its
shareholders at a ratio of 1.0651 additional BHP shares for each BHP share
held.


The existing Billiton share capital of 2,319 million shares will not be
affected by the merger. Based on the terms of the merger the aggregate number
of shares on issue in both companies following the merger would be
approximately 6,024 million. Each of these shares would have equivalent
economic and voting rights in the combined group.


The merger is conditional upon the approval of both BHP and Billiton
shareholders and certain regulatory approvals.





HIGHLIGHTS

BHP Billiton will:


  * own an exceptional asset base of low-cost, long-life operations, with
    outstanding commodity and country diversification;

  * occupy industry-leader or near-leader positions in aluminium,
    metallurgical coal, seaborne steaming coal, copper, ferro-alloys, iron ore
    and titanium minerals, and have substantial interests in oil, gas,
    liquified natural gas (LNG), nickel, diamonds and silver;

  * be ideally placed to serve the commodity requirements of a diverse
    customer base across six continents, but predominantly in Asia, Australia,
    Europe and North America;

  * have proforma revenues of approximately US$18.6 billion and EBIT of
    approximately US$3.3 billion for the 12 months to 31 December 2000, making
    it one of the largest diversified resources groups in the world;

  * generate strong cash flows, with proforma EBITDA for the 12 months to 31
    December 2000 of approximately US$4.9 billion, which will support the
    development of internal and external growth opportunities across the range
    of its businesses;

  * combine two experienced and innovative management teams sharing a future
    industry vision, and focussed on achieving superior shareholder returns;

  * deliver estimated pre-tax merger benefits of US$270 million in financial
    year 2003.




The BHP Steel assets are intended to be spun-out to BHP shareholders as a
separate business under independent management, with an appropriate adjustment
to compensate Billiton shareholders. This spin-out, which would be subject to
relevant shareholder approval, is expected to be completed by the end of 2002
and will enhance the BHP Billiton focus on minerals and petroleum.




COMMENTS


'This is a sensational fit,' Mr Anderson, Managing Director and Chief
Executive Officer of BHP said.


'The companies balance each other well, with an exceptional breadth of assets
and capabilities which have taken many years to develop. The outstanding
project portfolio is enhanced by a strong balance sheet, strong capital
disciplines and a common commitment to shareholder value.'


'I am delighted to see discussions, which have been going on between us for
some time now, bear fruit. Both companies have evolved to the point where we
are convinced that by putting together our complementary, high-quality assets
with the very best of our skills and people, we will create a resource group
that will deliver exciting growth and value for shareholders, customers,
communities and employees.'


'Additionally, the dual listed structure provides the financial flexibility
required to compete in the global capital markets of the twenty-first
century,' Mr Anderson said.


Mr Gilbertson, Chairman and Chief Executive of Billiton said, 'This merger
brings together some of the world's finest mining, metals and energy assets
under a dynamic and unified executive team. Few, if any, of our competitors
will be better placed to serve the commodity requirements of our diverse
customer base. The financial strength, international scope, and enhanced
project skills of the combined group should bring major new growth
opportunities internationally. In all of this, there will be unrivalled career
opportunities for skilled and ambitious employees.'


'Our aspirations include an unequivocal commitment to the highest standards of
health, safety and environmental practice, and the creation of sustainable
development solutions benefiting all stakeholders, so that the value creation
is genuine, broadly-based and enduring.'




RATIONALE FOR THE MERGER


The Boards of both companies believe that the merger will establish a powerful
platform for future growth in shareholder value.


Each of BHP and Billiton have world class positions in commodity businesses to
which the other has no existing exposure. The merger will result in
shareholders of each company gaining exposure to those commodities without the
risks normally associated with developing new projects and businesses.


BHP Billiton will also enjoy the following advantages:


  * an innovative and experienced management team, with a shared vision of
    industry transformation, developed portfolio management skills, capital
    deployment disciplines and an established project execution and management
    track record;

  * an outstanding diversity of commodity exposures, and an innovative
    approach to satisfying customers' raw material requirements;

  * a diverse customer base spread across six continents, with a
    predominance in Asia (29%), Australia (24%), Europe (20%) and North
    America (17%);

  * one of the world's leading and lowest cost producers of aluminium,
    metallurgical and steaming coal, copper, iron ore, ferro-alloys and
    titanium minerals with an excellent operating position in oil, gas and
    LNG, diamonds, nickel, silver and steel. Key assets include:

- iron ore operations in Western Australia;

- Worsley alumina plant in Western Australia;

- aluminium smelting operations in Southern Africa;

- Escondida copper mine in Chile;

- steaming coal operations in South Africa, New South Wales, Colombia and New
Mexico;

- metallurgical coal operations in Queensland;

- North West Shelf LNG operations and the Bass Strait oil and gas fields in
Australia; and

- ferro-alloy operations in Australia and South Africa.


  * enhanced financing capability arising from significant balance sheet
    capacity and a strong, broadly-based cash flow profile;

  * sustained growth through an outstanding portfolio of brownfield and
    greenfield projects including:

- copper (Escondida Phase IV and Escondida Norte, Antamina, Spence, Tintaya);

- aluminium (Mozal Phase 2, Hillside Phase 3);

- iron ore (Mining Area C);

- thermal coal (Cerrejon Central and Norte, Mount Arthur North, New Mexico);


    - oil, gas and LNG (North West Shelf 4th and 5th Trains, Mad Dog,
    Atlantis, Ohanet and

    ROD 401/402);

- nickel (Ravensthorpe project and Yabulu expansion); and

- diamonds (Ekati expansion);


  * the benefits of scale and depth in key areas such as capital allocation,
    risk assessment and market knowledge;

  * an improved ability to service customers;

  * identified merger benefits, through the elimination of duplicated
    overheads, and efficiencies in procurement, exploration, marketing and
    technology which are currently expected to amount to US$270 million before
    tax in financial year 2003 with further benefits to be realised
    thereafter;

  * access to the world's leading capital markets and inclusion in primary
    indices in the United Kingdom, Australia and South Africa.




BHP STEEL


The BHP Board has been considering for some time a range of initiatives to
maximise the value of each of its businesses, particularly BHP Steel, in the
context of an asset portfolio focussed on the growth of BHP's minerals and
petroleum businesses.


The merger of BHP and Billiton, and the consequent further re-weighting of the
combined asset base towards minerals and petroleum, means that it is the
appropriate time to spin-out BHP Steel to maximise the ongoing prosperity of
that business.


BHP Steel is intended to be spun-out to BHP shareholders by the end of 2002
and would be accompanied by an appropriate adjustment to compensate Billiton
shareholders for the value distributed to BHP shareholders.




DETAILS OF THE MERGER STRUCTURE


Creation of the DLC structure will not require shareholders of either company
to exchange or tender their existing shares, and each share in BHP and
Billiton will have an equivalent effective economic and voting interest in the
merged group.


The shareholders of BHP and Billiton will take key decisions on matters
affecting the merged group through a procedure in which the shareholders of
both companies will have equal voting rights per share. Accordingly,
shareholders of BHP and Billiton will effectively have an interest in a single
group combining all of the assets of both companies with a unified Board and
management. Following completion of the merger, and taking account of the
intended BHP Steel spin-out and the share buy-back recently announced by BHP,
it is anticipated that the interests of the shareholders of BHP and Billiton
in the single group will be of the order of 58% and 42% respectively.


In order to implement the DLC, and reflecting the agreed terms of the merger,
BHP will make a bonus issue to its shareholders at a ratio of 1.0651
additional BHP shares for each BHP share held at that time, following which
the dividend and capital rights of each BHP share relative to each Billiton
share will be one to one.


Should any future corporate action benefit shareholders in only one of the two
companies, an appropriate action will be taken to ensure parity between BHP
and Billiton shares.


BHP and Billiton will continue as separate publicly quoted companies and
retain their existing stock exchange listings and index participations.


Certain BHP shareholders may prefer to hold their interest in the merged group
through Billiton. Following completion of the merger, the Directors of BHP
Billiton will consider a proposal to enable BHP shareholders to exchange some
or all of their holding of BHP shares for an equal number of new Billiton
shares, up to a limit of 10% of the then issued share capital of BHP.


An amount of US$100 million will be payable by either BHP or Billiton, in
certain circumstances, if the transaction does not proceed.




FINANCIAL INFORMATION



The merged group will have an extremely strong financial base with powerful
cash flow generation capabilities. Aggregated for calendar year 2000, the
merged group would have had under UK Generally Accepted Accounting Practices
('GAAP'):


  * revenues of US$18.6 billion (A$32.8 billion);


  * EBITDA of US$4.9 billion (A$8.7 billion);


  * EBIT of US$3.3 billion (A$5.9 billion);

  * attributable profit of US$2.0 billion (A$3.6 billion);

  * interest cover of 6.1 times;

  * EBITDA interest cover of 9.0 times; and

  * as at 31 December 2000, gearing of 32.5%.


BHP and Billiton intend to prepare a single set of combined accounts,
denominated in US dollars and prepared under merger accounting principles in
accordance with UK GAAP, with reconciliations to both Australian and US GAAP,
together with any other financial information needed to meet their respective
local requirements. The financial year end of both BHP and Billiton will
remain 30 June.





BOARD AND MANAGEMENT


The Boards of Directors of the two companies will be identical and will
comprise the current non-Executive Directors of both BHP and Billiton,
together with the Chief Executive Officer, the Deputy Chief Executive Officer,
the Chief Development Officer and the Executive Director, Global Markets. Mr
Don Argus, currently Chairman of BHP will become Chairman of the merged group
and Mr John Jackson, currently the Senior Non-Executive Director of Billiton
will become Deputy Chairman.


Mr Paul Anderson, Chief Executive Officer of BHP, will become Chief Executive
Officer of BHP Billiton and Mr Brian Gilbertson, current Chairman and Chief
Executive of Billiton, will become Deputy Chief Executive Officer and
CEO-designate, to succeed as Chief Executive Officer by the end of 2002. Two
further Executive Directors will be appointed. Mr Mick Davis (currently
Executive Director, Finance of Billiton) will become Chief Development
Officer, based in London. Mr Ron McNeilly (currently President BHP Minerals)
will become Executive Director, Global Markets.


Mr Charles Goodyear, the current Chief Financial Officer of BHP, will become
the Chief Financial Officer of BHP Billiton.


BHP Billiton will establish an eight person Executive Committee comprising: Mr
Anderson, Mr Gilbertson, Mr Davis, Mr Goodyear, Mr Mike Salamon (Chief
Executive Minerals), Mr Philip Aiken (Chief Executive Petroleum), Mr Kirby
Adams (Chief Executive Steel) and Mr John Fast (Chief Legal Counsel).


The group will have its headquarters in Melbourne, Australia, with a
significant corporate management centre in London. Group head office functions
will be split between the two locations.


An integration team has been established, headed by Mr Brad Mills, Chief
Strategic Officer of BHP, and Mr Mike Salamon, Executive Director of Billiton,
to ensure that the new organisation retains the best attributes and talent of
the existing organisations, and develops a programme to quickly capture
synergies and other benefits presented by the merger.




OTHER INFORMATION


Shareholders of each company will continue to receive dividends from the
company in which they hold shares.


Dividends will be determined in US dollars on an equalised net cash payable
basis such that, following the proposed BHP bonus issue, each company will pay
an equivalent cash amount on each ordinary share.


BHP cash dividends will be paid in Australian dollars and Billiton cash
dividends will be paid to holders on the London register in pounds sterling
and to those on the Johannesburg register in South African rand.


An appropriate policy for dividend payments will be established which reflects
earnings growth, financial condition and group prospects. Initially, dividends
from BHP Billiton will be consistent with the dividend level paid by BHP. At
current exchange rates, this would represent an increase in dividend income of
approximately 10% for Billiton shareholders. Dividends paid on BHP shares will
continue to qualify for Australian franking credits when available. Capital
management will remain a priority and, accordingly, the recently announced BHP
on market share buy-back will proceed. The buy-back programme is expected to
be completed within 12-18 months, depending on market circumstances.


The Directors of both companies have been advised that Australian and UK
resident shareholders of BHP and Billiton will not be treated as having
disposed of their shares for Australian and UK capital gains tax purposes upon
the formation of the DLC.




APPROVAL PROCESS AND TIMETABLE


The transaction is subject to the approval of the shareholders of both
companies by special resolution and to the receipt of certain regulatory
approvals and clearances.


Details of the proposal will be set out in circulars to be sent to
shareholders as soon as possible. Each company will hold its shareholder
meetings approximately four weeks thereafter. Completion will occur as soon as
all necessary approvals have been obtained. The companies do not anticipate
any significant competition or other regulatory concerns.


ends




Financial advisor to BHP is UBS Warburg.


Joint financial advisors to Billiton are JPMorgan and Gresham Advisory
Partners Limited.


Corporate brokers to Billiton are JPMorgan and Dresdner Kleinwort Wasserstein.

In addition, Billiton has received financial advice from Dresdner Kleinwort
Wasserstein.




This announcement is issued by BHP and Billiton and has been approved by J.P.
Morgan plc ('JPMorgan') and UBS Warburg Ltd., a subsidiary of UBS AG, for the
purposes of Section 57 of the Financial Services Act 1986.

This announcement does not constitute a recommendation regarding the purchase
or sale of the ordinary shares of BHP or Billiton. Shareholders should seek
advice from an independent financial adviser as to the suitability of any
action for the individual concerned. This announcement does not constitute an
offer or invitation to purchase any securities or a solicitation to vote in
favour of the proposed DLC merger. Any shareholder action required in
connection with the proposed transaction will only be set out in documents to
be published in due course and any decision made by shareholders should be
made solely on the basis of information provided in those documents.


Certain statements in this announcement, particularly those regarding
synergies, debt, costs, dividends, earnings, returns, share buy-backs,
divestments, reserves and growth are or may be forward looking statements and
actual results may differ materially from the statements made depending on a
variety of factors, including successful integration of BHP and Billiton.


UBS Warburg Australia Corporate Finance Ltd., which is regulated in Australia
by the Australian Securities and Investments Commission, and UBS Warburg Ltd.,
which is regulated in the United Kingdom by The Securities and Futures
Authority Limited, (together 'UBS Warburg', both subsidiaries of UBS AG) are
acting for BHP and no one else in connection with the proposed merger and will
not be responsible to anyone other than BHP for providing the protections
afforded to customers of UBS Warburg and its subsidiaries and affiliates, nor
for providing advice in relation to the proposed merger.


J.P. Morgan plc ('JPMorgan'), which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting for Billiton and no one
else in connection with the proposed merger and will not be responsible to
anyone other than Billiton for providing the protections afforded to customers
of JPMorgan, nor for providing advice in relation to the proposed merger.


Gresham Advisory Partners Limited, which is regulated in Australia by the
Australian Securities and Investments Commission, is acting for Billiton and
no one else in connection with the proposed merger and will not be responsible
to anyone other than Billiton for providing advice in relation to the proposed
merger.


Kleinwort Benson Limited ('Dresdner Kleinwort Wasserstein'), which is
regulated in the United Kingdom by The Securities and Futures Authority
Limited, is acting for Billiton and no one else in connection with the
proposed merger and will not be responsible to anyone other than Billiton for
providing the protections afforded to customers of Dresdner Kleinwort
Wasserstein, nor for providing advice in relation to the proposed merger.

ENQUIRIES:


BHP


Melbourne (media):

Mandy Frostick, Manager Media Relations, BHP Limited

Tel:      [phone]               Mobile: [phone]

                              email: [e-mail]


Melbourne (investor relations):

Robert Porter, Vice President Investor Relations, BHP Limited

Tel:     + 61 3 9609 3540               Mobile:[phone]

Fax:     + 61 3 9609 3006               email: [e-mail]


Houston (investor relations):

Francis McAllister, Vice President Investor Relations, BHP Limited

Tel:     [phone]               Mobile:[phone]

                              email: [e-mail]


Billiton


London (media and investor relations):

Marc Gonsalves, General Manager, Billiton

Tel:     [phone]               Mobile:[phone]

Fax:     [phone]               email: [e-mail]


Johannesburg (media and investor relations):

Michael Campbell, Manager Corporate Affairs, Billiton

Tel:     [phone]               Mobile:[phone]

Fax:     [phone]               email: [e-mail]

ATTACHMENT 1 - PRO FORMA FINANCIAL OVERVIEW OF MERGED GROUP


Aggregated Financial Information

(12 months to 31 December 2000 and based on UK GAAP)



                                                              US$bn     A$bn*
Total Sales Revenues**                                        18.6      32.8
EBITDA**                                                       4.9       8.7
EBIT**                                                         3.3       5.9
Attributable profit                                            2.0       3.6
Operating cash flows***                                        4.6       8.2
Attributable net assets                                       11.9      21.5
Net debt                                                       6.1      11.0
Net debt/equity                                                    51.3%
Gearing (net debt/net debt + net assets)                           32.5%
Interest cover ratio                                               6.1x
EBITDA interest cover                                              9.0x


                *      Based on an exchange rate of US$0.5548:A$1 for balance
                sheet purposes and US$0.5655:A$1 for profit and loss purposes.

                **     Including share of joint ventures and associates

                ***     Including dividends from joint ventures




                EBITDA comprises earnings before interest, tax, depreciation
                and amortisation.

                EBIT comprises earnings before interest and taxation.

        Interest cover ratio is the ratio of EBIT to net interest adjusted for
        non-cash items.

        EBITDA interest cover is the ratio of EBITDA to net interest adjusted
        for non-cash items.


The breakdown of net operating assets and EBIT may be represented as follows:


                                                Net Operating
                                                                        EBIT
                                                    Assets
By commodity:                                         %                   %
Aluminium                                             16                 13
Base Metals                                           21                 15
Coal                                                  14                 16
Ferroalloys                                           5                   5
Iron Ore                                              7                  13
Nickel                                                6                   4
Oil and Gas                                           14                 38
BHP Steel                                             11                 12
Other commodities                                     8                   4
Others                                               (2)                (20)
By geographic origin:                                 %                   %
Australia                                             36                 52
Europe                                                4                   7
North America                                         3                   3
South America                                         28                 18
Southern Africa                                       21                 17
Rest of World                                         8                   3


The breakdown of revenue by geographical market may be represented as follows:


                                                                          %
Australia                                                                24
Europe                                                                   20
North America                                                            17
Japan                                                                    13
Other Asia                                                               11
South Korea                                                               5
Southern Africa                                                           5
Rest of World                                                             5




Notes:

The unaudited financial information above reflects the proposed Merger of BHP
and Billiton to form BHP Billiton. It is intended that under UK GAAP the
Merger will be accounted for using merger accounting principles. The unaudited
proforma financial information has been prepared based upon the accounting
policies of Billiton and has been prepared in accordance with UK GAAP, which
differs in certain significant respects from US and Australian GAAP. In
practice, restatement of the BHP results to UK GAAP has not required material
adjustments to the results prepared under Australian GAAP.

The unaudited proforma financial information has:


 1. been included for illustrative purposes only and, because of its nature,
    may not give a true and fair picture of the results, cash flows, and the
    financial position of BHP Billiton;

 2. been adjusted to eliminate an impairment charge in the P&L account of
    US$0.6 billion (US$0.3 billion net of tax) arising in the year in respect
    of BHP's Western Australian HBI plant as it is not representative of the
    combined business going forward; and

 3. not been adjusted to reflect any costs of the Merger or Merger benefits.




ATTACHMENT 2 - BHP - KEY FACTS

COMPANY DESCRIPTION

Overview

BHP is a global natural resources company, engaged in the discovery,
development, production and marketing of iron ore, coal, copper, oil and gas,
diamonds, silver, lead, zinc and a range of other natural resources. BHP has
28,000 employees in more than 30 countries and is headquartered in Melbourne,
Australia.

Market Capitalisation

A$38 billion at 16 March 2001.

Number of fully paid shares at 14 March 2001: 1,794,027,311.

Listed on Stock Exchanges in Australia, the UK (London), Germany (Frankfurt),
New Zealand (Wellington), Switzerland (Zurich) and in the form of American
Depositary Receipts in the United States (New York).

ADR Listing NYSE: 40,039,000 ADRs (shares/ADR:2).

Exchange Symbol: BHP (Australia); BHP/NYSE (United States).


Financial Information

(12 months to 31 December 2000 and based on UK GAAP)

                                                                        US$bn
Total Sales Revenue*                                                    12.4
EBITDA*                                                                  3.5
EBIT*                                                                    2.4
Attributable profit*                                                     1.4
Operating Cashflow**                                                     3.4
Attributable net assets                                                  5.9
Net debt                                                                 3.4
Net debt/equity                                                         57.6%
Gearing (net debt/net debt + net assets)                                35.1%
Interest cover ratio                                                    6.3x
EBITDA interest cover ratio                                             9.4x


            * Including joint ventures and associates

            ** Including dividends from joint ventures




        EBITDA comprises earnings before interest, tax, depreciation and
        amortisation

        EBIT comprises earnings before interest and taxation

        Interest cover ratio is the ratio of EBIT to net interest adjusted for
        non-cash items

        EBITDA interest cover is the ration of EBITDA to net interest adjusted
        for non-cash items

The unaudited financial information for BHP has been prepared based upon the
accounting policies of Billiton and has been prepared in accordance with UK
GAAP, which differs in certain significant respects from US and Australian
GAAP. In practice, restatement of BHP results to UK GAAP has not required
material adjustments to the results prepared under Australian GAAP.

This unaudited proforma financial information has been adjusted to eliminate
an impairment charge in the P&L account of US$0.6 billion (US$0.3 billion net
of tax) arising in the year in respect of BHP Western Australian HBI plant.



RECENT CORPORATE HISTORY


  * New Managing Director and Chief Executive Officer (Paul Anderson,
    formerly Chairman and Chief Executive Officer of Pan Energy and President
    and Chief Executive Officer of Duke Energy) appointed December 1998.

  * Major restructuring process commenced: closure and/or divestment of loss
    making or non-strategic assets (A$7.0 billion worth of assets sold
    FY1998-FY2000).

- Spin-out of long products steel business - October 2000.


    - Return on shareholders' equity increased to 27% (6 months to 31 December
    2000 annualised).

Major growth programme committed:


  * Typhoon oil field development, Gulf of Mexico - January 2000.

  * ROD 401/402 oil field development - June 2000.

  * Ohanet wet gas field development - July 2000.

  * QCT acquisition - October 2000.

  * San Juan Underground development - October 2000.

  * Escondida Phase IV development - November 2000.

  * Tintaya Oxide development - February 2001.




PORTFOLIO OVERVIEW




  * World's 3rd largest iron ore producer.

  * World's largest producer of export metallurgical coal.

  * World's 4th largest producer of copper.

  * Significant oil and gas exploration and production business.

  * Regional steel business focussed on Australasia.

                                Net operating assets                   EBIT
Base Metals                              24%                           19%
Coal                                     13%                           18%
Iron Ore                                 13%                           18%
Oil & Gas                                26%                           54%
BHP Steel                                22%                           17%
Others                                   2%                           (26)%

Production statistics in the following section are for the year ended 31
December 2000 unless otherwise stated.



MINERALS

COPPER

Attributable copper production: 851,000 tonnes contained in concentrate and
cathode.


Escondida (BHP 57.5%)


  * Production commenced at Escondida in late 1990. Production for the
    twelve months ended June 2000 was approximately 920,000 tonnes of copper
    contained in concentrate and cathode (100% basis).

  * BHP is the operator and has a 57.5% interest in the mine. Other joint
    venture participants are Rio Tinto (30%), Japan Escondida Corporation
    (owned beneficially by Mitsubishi Corporation, Mitsubishi Materials
    Corporation and Nippon Mining and Metals Company Limited) (10%) and the
    International Finance Corporation (2.5%).


Committed Growth Projects


  * Escondida Phase IV expansion project approved in November 2000.

  * Will increase total sulphide ore processing capacity by 85% to 237,500
    tonnes per day and increase total copper production to 1.2 million tonnes
    per annum over the first five years of full production.

  * Estimated capital cost of US$1,045 million (BHP share US$600 million).
    First production from the new concentrator is scheduled for September 2002
    with full production by April 2003.


Planned Growth Projects


  * Escondida Norte is a significant high grade resource, located five
    kilometres north of the existing Escondida pit.


Tintaya (BHP 99.96%)


  * Tintaya commenced operations in 1984, with BHP acquiring its interest in
    1996. The operation currently produces approximately 90,000 tonnes per
    annum of copper contained in concentrate.


Committed Growth Projects


  * BHP committed to the development of an oxide plant at the Tintaya
    operations in February 2001. The project involves the construction of a
    copper leaching and Solvent extraction electrowinning (SX/EW) facility to
    initially produce 34,000 tonnes per annum of copper contained in cathode,
    raising to 40,000 tonnes after two years.






IRON ORE

Attributable iron ore production: 61.3 million tonnes.


Western Australia (BHP 85%)


  * BHP operates iron ore mines, processing and shipping facilities in the
    Pilbara region of Western Australia. The mines include Mt Whaleback,
    Orebody 23/25, Jimblebar and Orebody 29/30, all located near the town of
    Newman, and Yandi, located 120 kilometres north of Newman. A 426 kilometre
    railway links the Newman and Yandi mines to the Nelson Point processing
    and shipping facilities located at Port Hedland.

  * A second railway system links the Yarrie mine, located 180 kilometres
    east of Port Hedland, to the processing and shipping facilities at
    Finucane Island, located on the opposite side of Port Hedland harbour. A
    1.2 kilometre under harbour tunnel links Nelson Point and Finucane Island.


Planned Growth Projects


  * Mining Area C is a marra mamba type iron deposit located approximately
    100 kilometres north of Newman and approximately 30 kilometres from Yandi.
    BHP signed a Letter of Intent with Posco in January 2001 to enter into a
    joint venture for the development and operation of an iron ore mine at the
    'C' deposit of Mining Area C. First production is scheduled for 2003 at an
    initial rate of 3.5mtpa, building to 15mtpa as market conditions allow.


Samarco (BHP 50%)


  * BHP owns 50% of Samarco, a Brazilian iron ore pellet and concentrate
    producer. CVRD owns the other 50%. Samarco operates an open pit mine
    (Alegria) and concentrator at Germano and pelletising operations and a
    port at Ponta Ubu. Iron concentrates are transported to port by a 396
    kilometre slurry pipeline.

  * In the year ended 30 June 2000, Samarco produced 13.5 million tonnes of
    pellets and pellet feed (100% basis).




COAL

Attributable coal production: 53.9 million tonnes.


Queensland Coal


  * BHP manages nine mines (eight open pit, one underground) and one port in
    the Bowen Basin, Queensland, Australia. The combined operations produced
    40 million tonnes of coal in the year ended 30 June 2000, of which BHP's
    share was 23 million tonnes

  * Central Queensland Coal Associates (CQCA) Joint Venture (BHP 52.1%)
    operates five open pit mines - Blackwater, Goonyella, Peak Downs, Saraji
    and Norwich Park, and the port of Hay Point. Gregory Joint Venture (BHP
    64.14%) operates the Gregory and Crinum mines. BHP Mitsui Coal (BHP 80%)
    operates the Riverside and South Walker Creek mines.

  * BHP and Mitsubishi jointly made a successful takeover bid for QCT
    Resources in October 2000. QCT Resources owned 32.37% of the CQCA and
    Gregory JV's, plus the wholly owned South Blackwater mine, which is
    adjacent to CQCA's Blackwater mine


Committed Growth Projects


  * BHP and Mitsubishi have committed to integrating QCT's South Blackwater
    mine with the adjacent CQCA owned Blackwater mine.


New Mexico Coal (BHP 100%)


  * BHP owns three open pit thermal coal mines (Navajo, San Juan and La
    Plata) in the Four Corners region of New Mexico, United States. All three
    mines supply run of mine thermal coal to two mine mouth power stations.


Committed Growth Projects


  * In October 2000, BHP approved the development of an underground longwall
    mine at San Juan to replace production from the existing higher cost San
    Juan and La Plata surface operations. Capital cost is US$148m with initial
    production in May 2002 and full production expected in late 2002.


Illawarra Coal (BHP 100%)


  * BHP owns and operates five underground coal mines (Appin, Tower,
    Cordeaux, Elouera and West Cliff) in the Illawarra region of New South
    Wales, Australia, that produce coal primarily suited for coking.
    Production in the year ended June 2000 was 6.9 million tonnes. Cordeaux
    will close in March 2001.


Indonesia Coal (BHP 80%)


  * BHP has an 80% interest in three thermal coal mines (Senakin, Satui and
    Pentangis) located in the Kalimantan region of Indonesia. Production is
    approximately 9 million tonnes per annum.




DIAMONDS


EKATITM (BHP 51%)

Attributable diamond production: 1.3 million carats.


  * BHP has a 51% interest in the EKATITM diamond mine located in the
    Northwest Territories of Canada. The mine commenced production in October
    1998 and production reached nameplate capacity of 3mtpa in May 1999.




SILVER/LEAD/ZINC

Cannington (BHP 100%)

Attributable silver production: 32.5 million ounces contained in lead
concentrate.

Attributable lead production: 211,009 tonnes contained in concentrate.

Attributable zinc production: 66,933 tonnes contained in concentrate.


  * Cannington is one of the world's largest silver producers.




OIL AND GAS

Attributable crude oil and condensate production: 83.8 million barrels.

Attributable gas production (natural gas, LNG and ethane): 246 billion cubic
feet.


Bass Strait (BHP 50%)

Attributable crude oil and condensate production: 31.9 million barrels.


  * The Bass Strait oil and gas fields located in the Gippsland Basin,
    offshore southern Australia, are BHP Petroleum's largest assets. The
    fields were discovered in 1965 with first production in 1968. Interests in
    the fields are owned 50% by BHP and Exxon/Mobil, with Exxon/Mobil as the
    operator.

  * BHP's share of estimated remaining proved reserves at 30 June 2000 was
    275 million barrels of oil, condensate and LPG and 1,855 billion cubic
    feet of natural gas.


North West Shelf (BHP 16.67% LNG, 8.33% domestic gas)

Attributable liquefied natural gas production: 58.6 billion cubic feet.


  * Unincorporated joint venture which has six participants and is operated
    by Woodside Petroleum Ltd. The project consists of two major phases, the
    liquefied natural gas (LNG) phase and the domestic gas phase, which are
    owned under different structures.

  * BHP's interests are 16.67% in the LNG phase and 8.33% in the domestic
    gas phase. Other participants in the project are Woodside Petroleum,
    Shell, BP, Chevron and a Japanese consortium. The LNG phase is owned
    equally by the six participants.

  * Produces approximately 700,000 barrels oil-equivalent per day (gross).
    The current production of the major commodities is: LNG 7.5mtpa; natural
    gas (domestic gas) 550 mmscfd; crude oil 135,000bpd, condensate 100,000
    bpd and LPG 2,300 tpd (all figures gross).

  * BHP's share of the estimated remaining proved reserves in North West
    Shelf at 30 June 2000 was 2,271 billion cubic feet of gas, and 148 million
    barrels oil-equivalent of crude oil, condensate and LPG.


Planned Growth Projects


  * The North West Shelf Joint Venture participants expect to commit to the
    construction of a 4th LNG train in the first half of 2001, with a
    production capacity of approximately 4mtpa.


Liverpool Bay (BHP 46.1% Operator)

Attributable oil production: 8 million barrels.

Attributable gas production: 34 billion cubic feet.


  * Consists of four integrated fields located off the Welsh coast in the
    Irish Sea. Oil is produced from the Douglas and Lennox fields and gas from
    the Hamilton and Hamilton North fields. Gas production is sold to PowerGen
    for power generation.

  * BHP's share of estimated remaining proved reserves in the Liverpool Bay
    development at 30 June 2000 was 42.3 million barrels of oil and 390.3
    billion cubic feet of gas.


Laminaria (BHP 32.6%)

Attributable oil production: 15 million barrels.


  * The Laminaria and Corallina oil fields are located in the Timor Sea,
    about 550 kilometres north-west of Darwin, Australia. Laminaria was
    discovered in October 1994 and adjacent Corallina field was discovered in
    December 1995.

  * Oil production commenced in November 1999 using an FPSO (Floating
    Production Storage Offloading) vessel called the Northern Endeavour, which
    is permanently moored between the two fields. Gross production rates
    peaked at about 180,000 barrels of oil per day and current production is
    about 150,000 bopd (gross).


  * BHP has a 32.6125% interest in Laminaria and a 25% interest in
    Corallina. Other participants are Woodside Petroleum (operator) and Shell.

  * BHP's share of the estimated remaining proved reserves in the Laminaria
    and Corallina fields at 30 June 2000 was 33.2 million barrels of oil.


Griffin (BHP 45% Operator)

Attributable oil production: 6 million barrels.


  * BHP is the operator of the Griffin oil and gas project, offshore Western
    Australia.

  * First oil was produced through an FPSO facility (Griffin Venture) in
    January 1994. Liquids are exported via shuttle tankers and gas is piped
    ashore to Onslow and then sold into the Western Australian market under
    long term contracts.

  * BHP's share of the estimated remaining proved reserves in the Griffin,
    Chinook and Scindian fields at 30 June 2000 totalled 12.84 million barrels
    of crude oil and LPG and 7.3 billion cubic feet of gas.


Bruce (BHP 16%)

Attributable gas production: 25.6 billion cubic feet.


  * The Bruce field, which was discovered in 1974, is located approximately
    380 kilometres north-east of Aberdeen in the northern North Sea.

  * BHP has a 16% interest in the field which is operated by BP Amoco.
    Development is over three phases. Gas is sold under long term take or pay
    contracts to British Gas Trading Ltd and Corby Power Limited. Liquids are
    exported into the BP Amoco operated Forties Pipeline System.

  * BHP's share of estimated remaining proved reserves at Bruce at 30 June
    2000 was 15.4 million barrels of condensate and LPG and 319.9 billion
    cubic feet of gas.

  * BHP has a 31.83% operated interest in the adjacent Keith oil discovery.
    Development was approved in January 2000 and oil production began in
    November 2000.


Oil and Gas Committed Growth Projects

Typhoon (BHP 50%)


  * Typhoon is BHP's first commercial oil development in the deepwater Gulf
    of Mexico.

  * Located approximately 160 kilometres off the coast of Louisiana in 610
    metres of water in the Green Canyon play fairway of the Gulf of Mexico.

  * The field will be developed jointly by the operator, Chevron and BHP,
    each with a 50% interest.

  * Peak production is expected to be 40,000bpd and 60 mmscfd (gross). First
    production is expected in the third quarter of 2001. Capital cost is
    US$128m (A$192m) net to BHP.




BBRS/ROD (BHP 17.3%)


  * BHP has committed to the development of the oil accumulations located in
    blocks 401a/402a, situated in the Berkine Basin region of Algeria. The
    basin is located in the Sahara Desert, approximately 800 kilometres south
    of Algiers.

  * ROD/SFNE, extends into the neighbouring Block 403 concession, operated
    by AGIP and SONATRACH. A unitisation agreement is in place to govern joint
    venture operatorship and commercial arrangements for the development. The
    agreement gives BHP approximately 17% of overall project reserves.

  * The fields have estimated proven and probable gross reserves of 300
    million barrels oil equivalent (BHP share 60 million boe). The capital
    cost for the combined fields will be US$500 million (BHP share US$190
    million).

  * First production from the fields is expected in the first half of 2003.
    Gross peak production will be 80,000 barrels per day.


Ohanet (BHP 45% Operator)


  * A Risk Services Contract (RSC) was signed by SONATRACH, BHP and its
    joint venture partners in Algiers on 2 July 2000 for the development of
    four gas condensate reservoirs in the Ohanet region of Algeria.

  * Investment in the development will be approximately US$1 billion (BHP
    share US$460 million).

  * Total reserves estimates exceed 3.2tcf of pipeline quality gas, 97
    million barrels of condensate and 115 million barrels of LPG (all gross
    figures).

  * First production is expected in late 2003. Peak production rate will be
    around 26,000 barrels oil equivalent per day (boepd) of condensate, 21,000
    boepd of LPG and 655 million standard cubic feet per day (mmscfd) of sales
    gas.

  * As operator, BHP holds a 45% equity interest. Other joint venture
    participants are Woodside Petroleum Ltd (15%), Petrofac Resources (Ohanet)
    LLC 10% and a 30% interest is held by a Japanese consortium.


Oil and Gas Growth Projects

Gulf of Mexico, United States


  * BHP is one of the largest lease holders in the Gulf of Mexico in water
    depths greater than 460 metres. The company possesses a high quality
    portfolio in this area that includes 221 leases, as well as five
    additional leases in which it has an overriding interest.

  * Mad Dog (BHP 23.9%) BHP holds a 23.9% interest in Mad Dog with partners
    BP Amoco (operator with a 60.5% interest) and Unocal 15.6%. The partners
    expect to sanction commercial development of the Mad Dog field in late
    2001.

  * The Atlantis (BHP 44%) discovery is located approximately 24 kilometres
    northeast of Mad Dog. Further appraisal drilling will occur in 2001 before
    a decision on commercial development.

  * BHP holds a 44% non-operated interest in the Atlantis discovery, with BP
    Amoco, the field operator, holding a 56% interest.


Zamzama, Pakistan (BHP 47.5%)


  * Production from Zamzama commenced in March 2001 from an Extended Well
    Test, expected to initially deliver up to 80 million standard cubic feet
    of gas per day.


  * The Zamzama field has a production potential of 400-50 mmscfd. BHP has a
    47.5% interest in the field. Other interests: LASMO Oil Pakistan 23.75%;
    Premier Exploration Pakistan 23.75%; and Pakistan Government Holdings 5%.


STEEL

Attributable raw steel production: 6.2 million tonnes.


  * BHP's steel business supplies flat and coated products to Australasian
    markets and is centred on the Port Kembla integrated steelworks.

  * Port Kembla has a capacity of 5.0 million tonnes per annum of raw steel.

  * Port Kembla supplies hot rolled coil (HRC) to the pipe and tube
    industry, and plate and HRC to the structural and engineering construction
    industries and the mining industry. Tinplate is sold for steel can
    manufacture. Port Kembla also provides feed to Coated Steel Australia -
    HRC to Springhill (1mtpa) and slabs to Western Port (1.5mtpa).

  * Coated Steel Australia (CSA): Two main production facilities located at
    Springhill, NSW (adjacent to Port Kembla steelworks) and Western Port,
    Victoria, produce hot-rolled, cold-rolled, metallic coated, painted and
    electrical steel sheet and coil.

  * Coated Steel International: Operates coating and painting lines in
    Indonesia and Malaysia, cold-rolling, coating and painting in Thailand and
    a paint line in Saudi Arabia.

  * New Zealand Steel (NZS): New Zealand's sole flat products steelmaker,
    NZS produces hot-rolled coil, coated and painted steels and other sections
    using an electric furnace. Steelmaking capacity is 0.6mtpa.

  * Building Products: Produces and distributes steel rollformed products
    for roofing and walling applications. Its major supplier of steel is CSA.

  * BHP is also a 50% partner in a flat products steel mini-mill at Delta,
    Ohio, US. The mill has a capacity of 1.4mtpa.


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